# In re Ex Parte Application of JSC UNITED CHEMICAL COMPANY URALCHEM for an Order to Conduct Discovery for Use in Foreign Proceedings Pursuant to 28 U.S.C. § 1782

> District Court, D. New Jersey · July 24, 2020

URL: https://www.frixlaw.com/law-library/cases/10268662

## Case

- **Court:** District Court, D. New Jersey
- **Decided:** July 24, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

Civ. A. No. 20-3651 (CCC)
IN RE EX PARTE APPLICATION
OF JSC UNITED CHEMICAL
COMPANY URALCHEM for an
Order to Conduct Discovery for Use in
Foreign Proceedings Pursuant to 28
U.S.C. § 1782.
OPINION

FALK, U.S.M.J.

Before the Court is the application of Petitioner, JSC Uralchem, to serve discovery
pursuant to 28 U.S.C. § 1782. [ECF No. 1.] Uralchem, a Russian chemical company, seeks to
serve subpoenas, pursuant to Section 1782 and Federal Rule of Civil Procedure 45, on eight TD
Bank branches in New Jersey. The subpoenas seek TD’s account records for Lawton Lane
Chemical, Inc., a North Carolina company. Uralchem contends that Lawton is a “shell
company” that received funds diverted from another Russian company -- PJSC Togliattiazot
(“TOAZ”) -- in which Uralchem holds a minority shareholder interest.
Although commenced as an ex-parte application, Lawton sought - and was granted -
permission to intervene in this action for purposes of opposing the motion. See ECF No. 10.
Comprehensive briefs have been submitted, including an authorized sur-reply. No oral argument
was held. Fed. R. Civ. P. 78(b). For the reasons set forth below, Petitioner’s motion is
DENIED.
BACKGROUND1
Uralchem is a joint stock company incorporated in Russia that produces ammonium
nitrate and nitrogen fertilizers. See Declaration of Andrey Ermizin, ¶ 4.2 In 2008, Uralchem
became a minority shareholder in TOAZ, a Russian company that is among the top ammonia
producers in the world. Id., ¶ 5. Uralchem currently holds approximately 10% of TOAZ’s

outstanding shares. Id., ¶ 5. Mr. Vladmir Makhlai and Mr. Sergei Makhlai are alleged to have
de facto control over TOAZ, and together with family members and associates, are alleged to
control about 84% of TOAZ shares through a number of entities. Id., ¶ 7.
Petitioner contends that, for years, individuals controlling TOAZ, including the Makhlais,
have directed the company to sell its products at artificially low rates to a Swiss trader,
Nitrochem Distribution AG (“Nitrochem”), that is allegedly controlled by the same individuals.
Id., ¶ 8. In turn, it is alleged, Nitrochem would then re-sell the products to third parties at market
value. Id. As a result, profits were accrued through Nitrochem rather than properly through
TOAZ (the “Nitrochem/Toaz scheme”). Id.

Petitioner contends that the Nitrochem/Toaz scheme has spawned “numerous tax and

1 This section is assembled by drawing from the parties’ papers for the purpose of basic
background only. The parties have very different views of the events and individuals involved.
For example, Petitioner contends that TOAZ and the individuals that manage it are convicted
criminals; on the other hand, Lawton contends that Uralchem is managed by a “corporate raider”
favored by the Russian Government, and that the proceedings in Russia are “politically
motivated, corrupt corporate raiding, aided by Russian judges who are subject to political
influence and not independent.” (Opp’n Br. 2.) Nothing herein should be read to adopt or
endorse any of these characterizations and nothing in this Opinion purports to resolve any fact
disputes the parties may have.

2 Mr. Ermizin is Uralchem’s Deputy Head of the Legal Department. (Ermizin Decl., ¶1.)
criminal proceedings in Russia.”3 Included in this bundle of proceedings are apparently tax
judgments entered by 36 different judges across seven Russian courts, including Russia’s
Supreme Court. Id. Also included is a 2019 lawsuit brought by Uralchem against TOAZ and its
management for shareholder-type claims, which resulted in the entry of a judgment (the “2019
Proceedings.”).

At this time, Uralchem represents that it has hired counsel and that it intends to pursue a
second shareholder-based case against TOAZ that would “build upon” certain criminal
proceedings, as well as the completed 2019 Proceedings. (See Declaration of Vladimir Melnikov
¶ 7.)4 5 While the second case would be similar to the 2019 Proceedings, Uralchem claims that
this yet-to-be-filed new case would allegedly bring claims against TOAZ and its management for
a new time period, potentially include new defendants, and perhaps include a new legal theory.
Id.
In November 2019, in order to, among other things, “identify the proper defendants” for
the newly contemplated lawsuit, Petitioner sought discovery pursuant to 28 U.S.C. § 1782 in the

United States District Court for the District of Connecticut and in the United States District
Court for the Southern District of New York. (Id., ¶¶ 19-20; Reply Br. 15 n.7.) It appears that

3 The parties’ briefs discuss TOAZ and its managements’ litigation history dating back 15
years and involving proceedings in different countries.

4 Mr. Melinkov is a Russian-qualified lawyer and a partner in Moscow office of
Linklaters CIS. (Melinkov Decl., ¶ 1.)

5 The 2019 proceedings were limited to the period of 2008 through 2012. Petitioner
contends the limitation was the result of the civil proceeding being in some way limited or tied to
a Russian criminal case for that period.
both applications were made ex-parte, neither was opposed, and both were granted. Id. The
motion in Connecticut sought wire transfer records involving Nitrochem accounts held in a
Stamford-based branch of UBS AG. According to Petitioner, once received, that discovery
revealed that Nitrochem was allegedly engaging in “highly suspicious transfers” to Lawton Lane
Chemical, Inc., which Petitioner claims is a “shell company” associated with Sergei Makhlai.

Specifically, Petitioner claims that between 2009 and 2013, Nitrochem transferred a total of
$12,410,743 to Lawton through New Jersey TD Bank branches “without an obvious business
reason . . . .” Petitioner further states the following with respect to Lawton’s business structure
and affiliations:
Lawton is a company without a website or any other public profile. There is no indication
that Lawton is involved in trading with fertilizer companies or that it conducts any
alternative valid commercial business. …[P]ublic filings suggest[] that Lawton is
connected to TOAZ through Mr. Sergei Makhlai, who exercises de facto control of
TOAZ. For example, public records connect Sergei Makhlai to Lawton through a
company called MIC International Trading. Sergei Makhlai was the former President of
MIC. And, in turn, MIC shared the same Secretary/Treasurer as Lawton: Irene Michaels.
MIC’s secretary, Irene Michaels, also has a name and signature that are notably similar to
the name and signature of Sergei Mikhlai’s wife, Irina Makhlai. In addition, Lawton’s
current President, Pat Marchiionda, has the same address as the Principal Office Address
of MIC.

(Petitioner’s Br. 5-6, citing Ermizin Decl., ¶¶ 22, 24-27.)

That brings us to the present motion. Uralchem now seeks discovery of TD’s bank
records for Lawton wire transfers between 2009 and the present, including but not limited to
transfers in which the New Jersey banks acted as intermediaries or correspondent banks.
(Petitioner’s Br. 6.) Uralchem claims that this discovery will help it to understand to whom
Nitrochem was transferring money received from third-party buyers as part of the
Nitrochem/Toaz scheme. It claims such discovery will also help uncover the path of TOAZ’s
diverted profits and ensure those who profited from this scheme are named as Defendants in a
new case.
TD Bank does not oppose the application. (See Reply Br. 14.) Lawton, however,
opposes the application claiming that it fails to satisfy the statutory requirements for Section
1782 discovery, as well as for a number of discretionary reasons. Chief among them is Lawton’s

contention that Uralchem has no real intention to file a new lawsuit and that it is misusing
Section 1782 to obtain information to collect on a judgment, and that any new case would be
barred by res judicata-type principles. Lawton also strongly contends that the Russian judicial
system is biased against the Makhlais and any proceedings would not comport with the notions
of due process.
LEGAL STANDARD
Section 1782 is the “product of congressional efforts, over the span of nearly 150 years,
to provide federal court assistance in gathering evidence for use in foreign tribunals.” In re
O’Keeffe, 2015 WL 540238 (D.N.J. Feb. 10, 2015), aff’d, 2015 WL 5039723 (D.N.J. Aug. 26,

2015), aff’d 646 Fed. Appx. 263 (3d Cir. 2016). The statute provides in relevant part:
(a) the district court of the district in which a person resides or is found may order him to
give his testimony or statement or to produce a document or other thing for use in a
proceeding in a foreign or international tribunal, including criminal investigations
conducted before formal accusation.

28 U.S.C. § 1782(a).

“Congress enacted 1782 to further the following goals: facilitating the conduct of
litigation in foreign tribunals, improving international cooperation in litigation, and putting the
United States into the leadership position among world nations.” Bayer AG v. Betachem, Inc.,
173 F.3d 188, 191 (3d Cir. 1999). However, “these goals do not in turn mean that a party to
foreign litigation is entitled to unbridled and unlimited discovery under the statute.” Id. “Section
1782 vests district courts with discretion to grant, limit or deny discovery . . . . [A] district court
may refuse to grant a discovery request, or may impose various conditions and protective orders
attendant to the production of requested documents.” Id.

A court deciding a Section 1782 application “must first determine whether certain
statutory requirements are met, and if those requirements are satisfied, the Court may then
consider other factors to determine whether to exercise its discretion to grant the application.” In
re O’Keeffe, 646 Fed. Appx. 263, 265-66 (3d Cir. 2016). The statutory requirements are:
(1) the person from whom discovery is sought resides in the district;
(2) the request seeks the “testimony or statement” of a person or the production of a
“document or thing”;
(3) the discovery is for use in proceedings before a foreign or international tribunal;
and
(4) the application is made by either a foreign or international tribunal or an
interested party.

Id.

If the statutory requirements are met, the district court may – but is not required to –
allow discovery. The Supreme Court has identified four additional factors – referred to as the
Intel factors - that guide the Court’s “discretionary” decision:
(1) whether the documents or testimony sought are within the foreign tribunal’s
jurisdictional reach, and thus accessible absent Section 1782;
(2) the nature of the foreign tribunal, the character of the proceedings underway
abroad, and the receptivity of the foreign government or the court or agency
abroad to U.S. federal-court judicial assistance;
(3) whether the Section 1782 request conceals an attempt to circumvent foreign proof
gathering restrictions or other policies of a foreign country or the United States;
and
(4) whether the subpoena contains unduly intrusive or burdensome requests.
Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 264-65 (2004).

Section 1782 is intended to be interpreted liberally, and the party opposing a Section
1782 application has the burden to show why the discovery is improper. See, e.g., In re Bayer
AG, 146 F.3d 188, 196 (3d Cir. 1988) (“Consistent with the statute’s modest prima facie
elements and Congress’s goal of providing equitable and efficacious discovery procedures,
district courts should treat relevant discovery materials sought pursuant to Section 1782 as
discoverable unless the party opposing the application can demonstrate facts sufficient to justify
denial of the application.”); see also Kulzer v. Esschem, Inc., 390 Fed. Appx. 88, 92 (3d Cir.
2010).
DISCUSSION
A. Analysis of Statutory Requirements
The parties only dispute the third statutory requirement – i.e., whether the discovery
sought is “for use” in a “reasonably contemplated” foreign proceeding. See Intel Corp., 542 U.S.
at 259.6
To be considered “for use” in a foreign proceeding, the discovery should be something
“that will be employed with some advantage or serve some use in the proceeding.” Mees v.
Buiter, 793 F.3d 291, 298 (2d Cir. 2015). “Federal courts interpret the ‘for use’ phrase
liberally.” In re Application of Sauren-Fonds Select SICAV, 2016 WL 6304438, at *3 (D.N.J.
Oct. 26, 2016). The key question is not whether the information sought is “relevant,” but

whether it the proponent of the evidence “will actually be able to use the information in the

6 See Opp’n Br. 16; Reply Br. 2.
proceeding.” See Certain Funds v. KPMG, LLP, 798 F.3d 113, 120 (2d Cir. 2015) (emphasis in
original).
A foreign proceeding need not be pending at the time a Section 1782 application is filed,
provided it is “within reasonable contemplation.” Intel, 542 U.S. at 259. “Reasonable
contemplation” requires some showing of “objective indicium” and a “concrete basis” that a

contemplated action will proceed. See, e.g., Certain Funds, Accountants and/or Inv. Vehicles v.
KPMG, LLP, 798 F. 2d 113, 123-24 (2d Cir. 2015). While discovery should be liberally
allowed, Section 1782 is not traditionally employed in order to provide discovery to justify the
reopening of already completed foreign litigation. Cf. Comision Ejecutiva Hidoelectria del Rio
Lempa v. Nejapa Power Co., LLC, 341 Fed Appx. 821, 828 (3d Cir. 2009); In re Asia Maritime
Pacific Limtd., 253 F. Supp. 3d 701, 706-08 (S.D.N.Y. 2015).
Lawton challenges that any action is “reasonably contemplated” and that the discovery
sought is “for use” in such a proceeding. Lawton contends that Uralchem is simply trying to
trace down assets associated with the concluded 2019 Proceeding. Lawton further contends that

there is no “reasonable contemplation” that Uralchem will file what it claims is effectively the
same lawsuit as the 2019 suit, against the same defendants, seeking the same relief. Lawton also
contends that the discovery being sought was already excluded from the 2019 Proceeding, and
therefore, cannot be “for use” in any new proceeding. Finally, Lawton argues that any new case
would be barred by the Russian statute of limitations and res judicata-type principals.
Uralchem counters that the TD Bank records will be used to help prove damages for “a
new period of time, the liability of new defendants, and a new theory of liability.” (Reply Br. 8;
see also Melnikov Decl., ¶¶ 13-23.) Uralchem’s certifications explain that the 2019 Proceeding
only covered the time period of 2008 to 2012 because the suit tracked certain criminal charges
brought by Russian prosecutors at that time. Id., ¶¶ 17-23.
There is overlap and perhaps duplication between the 2019 Proceeding and the
contemplated new case. However, sworn certifications of the type submitted here are generally
sufficient to satisfy the requirement that a party has “reasonable intention” to proceed with a

lawsuit. See In re Top Matrix Holdings Ltd., 2020 WL 248716, at *4 (S.D.N.Y. Jan. 16, 2020)
(“sworn statements attesting to petitioner[’]s[] intent to litigate and describing the legal theories
on which they plan to rely are sufficiently concrete to meet the statutory requirement”); see also
Certain Funds, Accounts &/or Inv. Vehicles v. KPMG, L.L.P., 798 F.3d 113, 124 (2d Cir. 2015).
The Court is satisfied that Mr. Melinkov’s declaration establishes Uralchem’s intention to file a
new case.
But that is not the end of the statutory inquiry. The Court is not satisfied that the “for
use” requirement has been met. The “for use” requirement requires that the Petitioner establish
the discovery include “any materials that can be made use of in the foreign proceeding to

increase [the petitioner’s] chances of success.” In re the Application of Sauren Fonds-Select
SICAV, 2016 WL 6304438, at *3 (D.N.J. Oct. 26, 2016) (quoting Mees, 793 F.3d at 299)).
Uralchem claims that it intends to use the TD Bank records to “help trace proceeds from the
TOAZ-Nitrochem Scheme to unlawful recipients, helping to demonstrate their connection to and
participation in the fraud, and thus increasing Petitioner’s likelihood of succeeding on its
claims.” (Reply Br. 12.) That is not enough to satisfy the “for use” requirement.
Uralchem’s problem is that it argued, successfully, that the same information it now
seeks to obtain was not required to support its claims in the 2019 Proceeding. (Lawton’s Sur-
Reply 3; Melnikov Decl., ¶ 24.) The current position is a complete 180 unsupported by adequate
explanation. If the newly contemplated proceeding is merely building upon the 2019
Proceeding, as Uralchem contends, why would the need for such discovery change? A Russian
court has already determined – on Uralchem’s own argument - that this type of information is not
relevant to these types of claims. (Id.) This takes the steam completely out of Uralchem’s

position that the information is supposedly needed for their newly contemplated case. The Court
understands that this information may be useful – and desired – to conjure up new defendants or
try to collect on a prior judgment. But that is not the purpose of Section 1782 proceedings. See,
e.g., Ayyash v. Crowe Horwarth LLP, 2018 WL 2976017, at *3 (S.D.N.Y. June 13, 2018). A
foreign tribunal’s prior rejection of the same information sought in a 1782 application is
powerful evidence that the discovery is not “for use” in a foreign proceeding. See financialright
GmbH v. Robert Bosch LLC, 294 F. Supp. 3d 721, 730 (E.D. Mich. 2018) (the court is “mindful
that if history is any guide to the future, the documents in question will not be ‘usable’ and,
therefore, not ‘for use’ in these foreign proceedings.”).

The Court does not believe that it is in the interests of justice to allow discovery into a
non-party’s banking records when such documents have previously and expressly been rejected
by the same foreign tribunal in question. See, e.g., id. As a result, Uralchem has not establish
that the information sought is “for use” in a foreign proceeding, see Certain Funds v. KPMG,
LLP, 798 F.3d 113, 120 n.7 (2d Cir. 2015), while Lawton has shown that the discovery sought
would not be utilized in a newly filed case in Russia. See, e.g., Euromepa S.A. v. R. Esmerian,
Inc., 51 F.3d 1095, 1100 (2d Cir. 1995); Heraeus Kulzer, GMBH v. Biomet, Inc., 633 F.3d 591,
594 (7th Cir. 2011) (“[D]istrict courts must be alert for potential abuses that would warrant a
denial of an application” including “discovery of documents or other materials that the foreign
court would not admit into evidence.”).
Based on the above, the Section 1782 statutory requirements are not satisfied. Since
Petitioner has not met the statutory requirements for Section 1782 relief, there is no need to
evaluate the discretionary Intel factors. However, for purposes of completeness, they are

evaluated below. Moreover, even if the statutory requirements were satisfied, the Court is not
persuaded to exercise its discretion to allow the discovery sought based on the record presented.
B. Analysis of Discretionary Intel Factors
1. Intel Factor 1: Whether the Discovery is in the Foreign Tribunal’s Reach
This factor is not in dispute. Resort to Section 1782 is disfavored when the targets of
discovery are actual participants in the foreign proceeding. See Intel, 542 U.S. at 264. TD Bank

possesses the discovery sought. And Petitioner confirms that TD Bank is not and will not be a
party to any Russian proceeding. Therefore, the discovery sought is not available to the foreign
tribunal.
2. Intel Factor 2: The Nature of the Foreign Tribunal and Receptivity to Federal Court
Assistance

This factor focuses on the nature of the foreign tribunal. However, the papers are not
entirely clear as to the specific tribunal Petitioner is considering and whether any proceedings
would be limited to just one court. For example, at one point in the papers, it is said that
Petitioner may be seeking this discovery to support proceedings in Russia “or elsewhere.” (See
Opp’n Br. 14.) However, in reply, Petitioner seems to refer to a court in Samara, Russia.
(Melnikov Decl., ¶ 20.) Given there is some inconsistency in the papers it makes evaluation of
the “nature of” the specific tribunal somewhat complicated. Nevertheless, since the papers from
both parties do focus overwhelmingly on a contemplated action in Russia, we will consider this
factor in that context.
Lawton argues that the second Intel factor strongly weighs against discovery because the
Russian courts are unfairly biased against TOAZ and that the proceedings do not comport with

due process. Lawton contends that TOAZ is one of the largest Russian companies that is not
“state-controlled,” and therefore, is subject to continuous unfair and corrupt attacks and practices
spearheaded by the Russian Government, including the 2019 Proceeding and various criminal
matters in which Vladimir Makhlai appears to have been tried in absentia.
Section 1782 discovery must be “intended for use in a foreign proceeding which
comports with notions of due process.” John Deere Ltd. v. Sperry Corp.¸754 F.2d 132, 138 (3d
Cir. 1985). Courts in the United States must exercise “caution and deference . . . in even
approaching the question of the impartiality of a foreign court.” Aguinda v. Texaco, Inc., 2000
WL 122143, at *3 (S.D.N.Y. Jan. 31, 2000). However, Section 1782 is a discretionary statute,

and a petitioner is tasked with convincing the Court that granting the application is in the
interests of justice. See, e.g., Intel, 542 U.S. at 264 (“[A] district court is not required to grant a
Section 1782 discovery application simply because it has the authority to do so.”); In re Bayer
AG, 146 F.3d at 196 (3d Cir. 1998).
Here, the papers reflect a deeply contentious and politicized relationship between
Petitioner and the Makhlais that involves allegations of corruption and political bias and Russian
governmental interference. The papers present this issue in great detail. Included within this
discussion are two different extradition proceedings – one in 2008 and a second in 2016 – where
judges in the United Kingdom refused Russian extradition requests for Makhlai (and others)
based on the same basic Uralchem allegations set forth in this case.
The Court is not prepared to comment on the overall fairness of the Russian judicial
system, nor is it presently necessary. But it is worth noting that two respected courts have – and
not just on the Russian system at large, but specifically with respect to the actual individuals and

entities involved in this case. Some discussion of these findings is necessary to meet the Court’s
obligations as set forth by the Third Circuit in John Deere.
In 2009, with respect to a Russian Federation request to extradite Vladmir Makhlai from
the United Kingdom to face tax charges related to the TOAZ-Nitrochem scheme, a judge in
London denied the request and found:
• No evidence had been established that Makhali had an interest in Nitrochem;
• That the charges were politically motivated, the Judges were influenced, and the
trial would not be fair;
• That “unchallenged evidence clearly implicates officials from the Presidential
Administration in an attempt to influence a Judges [sic] decision in respect of the
TOAZ Corperation [sic]”;
• The proceedings [were] for the purpose of prosecuting or punishing the
defendants for their political opinions and that they will be prejudiced at their
trial.

(Declaration of Rodney Villazor, ¶¶ 14-20, Ex. 1 (2009 UK Decision)).

In 2016, the Russian authorities attempted to extradite a TOAZ manager, Evgeniy
Korolev, from the UK, again on Uralchem-related charges. The UK-based judge denied the
request, finding:
• The Uralchem related charges were “unlawful and abusive and part of a long
lasting corporate raid attack on Toaz” [and that] “Uralchem is constantly initiating
abusive document seizures and unfounded tax and criminal claims . . . for an
unlawful takeover of Toaz”
• That Mazepin [Uralchem’s owner] and Uralchem were engaged in an abusive raid
• With respect to the Russian courts, “[t]here is no sense that the courts will protect
Toaz from an unscrupulous raider such as a Mazepin . . .” and that there was a
“real risk that Mr. Korolev will face a flagrantly unfair trial” in Russia.

(Villazor Decl., Ex. 3.)
In addition, based on these extradition decisions, a court in the British Virgin Islands
denied a 2018 request by the Russian Federation to obtain documents about companies
purportedly connected to the alleged Toaz-Nitrochem scheme. Id. at Ex. 5. The court’s decision
relied on the prior extradition decisions and denied the Russian Federation’s request for
documents and information, finding that “the BVI authorities (to whom the Russian Federation
made its request) failed to give sufficient consideration to evidence that Toaz was subject to
unlawful corporate raiding.” (Lawton’s Sur-Reply at 10, citing Villazor Decl., Ex. 5 (judgment
entered in Magnum Inv. Trading Corp. et al. v. Attorney General of the B.V.I., High Court of
Justice (B.V.I.) (“2018 B.V.I. Decision”))).
The Court has an obligation to consider due process and the interests of justice. See John
Deere, 754 F.2d at 138. Suffice it to say that the papers submitted raise real questions about
whether a proceeding in Russia would afford due process or be in the interests of justice. Three
courts outside of Russia have previously found that Uralchem-related proceedings like this one
may be subject to undue governmental influence. These are presumably neutral courts making
findings, after lengthy hearings, that Uralchem-Toaz proceedings in Russia are concerning. This
causes the Court to pause and question what the interests of justice really require here. When
that backdrop is considered in light of the fact, discussed supra, that the information sought has
not been established to be “for use” in a judicial proceeding, the Court does not believe that the
interests of justice support discovery in this case. Thus, the Court would exercise its discretion
to deny the application.
3. Intel Factor 3: Circumvention of Proof Gathering Restrictions
The application presents additional concerns regarding the circumvention of proof
gathering restrictions and delay. Again, evidence of financial tracing was not relevant to the
2019 Proceedings. Therefore, pursuing similar documents now, after that proceeding has closed,

could be construed to be a circumvention of prior judicial decision-making or – at worst - sought
for potentially different reasons such as to collect on a judgment or further another domestic
Section 1782 application. In all events, Petitioner’s delay in waiting to pursue this information
until the 2019 Proceeding has concluded - and after it successfully excluded it from those
proceedings - raises concerns about the interests of justice in authorizing the discovery now.
Thus, even if the statutory requirements were met, the Court would be strongly disinclined to
exercise its discretion to authorize the discovery under the third Intel factor.
Intel Factor 4: Is the Section 1782 Request Unduly Burdensome or Intrusive?
“A district court evaluating a §1782 request should assess whether the discovery

sought is overbroad or unduly burdensome by applying the familiar standards of Rule 26 of the
Federal Rules of Civil Procedure.” Mees, 793 F.3d 302. The eight TD Bank branches – the
entities being served with the subpoenas – have not claimed that responding would be unduly
burdensome. However, Lawton, argues that the date range sought (2009 to present) is too
expansive, in part because Nitrochem allegedly dissolved in 2014. Lawton also argues that the
discovery sought is a classic fishing expedition, seeking to discovery new potential parties, rather
than collect evidence for already established claims. Given the concerns that have been raised
regarding the receptivity of the foreign tribunal to this type of evidence in the 2019 Proceedings,
the Court is not satisfied that the discovery sought is appropriate or proportional, and concludes
that it production could be unreasonably intrusive, especially given its apparent negligible
importance to any new Russian proceeding.
CONCLUSION
For the reasons stated above, Section 1782’s statutory requirements are not satisfied and

the discretionary Intel factors weigh against disclosure. Therefore, Petitioner’s application for
leave to serve discovery pursuant to Section 1782 [ECF No. 1] is DENIED.

s/Mark Falk________________
MARK FALK
United States Magistrate Judge

DATED: July 24, 2020

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10268662. Public record. Not legal advice.